Tough competition in the airlines sector has been putting pressure on weaker European carriers and driving consolidation, with Air Berlin and Alitalia filing for insolvency this year and seeking new investors for parts of their business.

"This is the U.K.'s largest ever airline to enter administration," CAA said.

The government has asked CAA to charter more than 30 aircraft to bring back to the U.K. Monarch Airlines customers currently overseas, CAA said in a statement.

The government has begun the biggest ever peacetime repatriation effort to return the affected passengers, Department for Transport, Foreign and Commonwealth Office said in a statement. Monarch said on Thursday it was talking to potential partners after a report that parts of its short-haul network would be sold.